The SPAC market is demonstrating renewed stability in 2025, with 74 de‑SPAC transactions raising a combined $14.7 billion year-to-date—evoking memories of the 2021 boom, albeit with greater moderation. While SPACs once comprised 64% of IPO volumes in 2021, their share has now fallen to around 38%, reflecting a shift toward more disciplined capital deployment.
This evolving ecosystem features prominent venture-backed companies executing strategic fundraising rounds. Community solar developer 38 Degrees North secured $230 million in growth capital from investors such as Climate Adaptive Infrastructure and Kimmeridge to expand its projects. Substack raised $100 million in a Series C round from A16z, Andreessen Horowitz, and others, propelling it past a $1.1 billion valuation. Perplexity AI closed a $100 million round at an $18 billion valuation, signaling strong investor confidence in AI-generated search technologies.
These funding achievements highlight renewed entrepreneurial vigor and capital market sophistication. In contrast to the speculative rush of the previous SPAC cycle, investors now appear to be selectively backing mature businesses with clear growth pathways—indicating enhanced market discipline. As Axios’ Pro Rata newsletter notes, the resurgence is led “by experienced SPAC sponsor teams and a high quality of overall targets.”
Industry experts offer a cautiously optimistic assessment: while SPACs no longer dominate IPO activity, they continue to attract both institutional and sophisticated retail capital. The key barometer going forward will be the proportion of SPAC-related IPOs relative to traditional offerings. Although veteran SPAC structures still carry a reputation for poor post-merger performance—over 90% have historically traded below their $10 offering price—they remain appealing when sponsor due diligence is robust and PIPE backers are strong.
38 Degrees North’s new funding underscores a broader trend: investors are supporting proven enterprise models in sectors like renewable energy, where tangible assets and revenue offer more certainty. Since its founding in 2019, the company has developed and managed over 350 MW of community solar across New York and Massachusetts.
Meanwhile, Substack and Perplexity AI illustrate robust momentum in digital media and AI. Substack’s substantial Series C round, backed by top-tier venture firms, suggests long-term platform growth is being prioritized over rapid exits. Perplexity’s valuation—coupled with its emphasis on AI-enhanced search—positions it as a key contender amid increasing demand for intelligent knowledge tools.
These developments coincide with macro-level changes: boutique and regional banks are re-engaging in SPAC sponsorship even as larger institutions remain cautious. On the regulatory front, the SEC has implemented new rules around SPAC disclosures, dilution, and shareholder protections, fostering a more transparent investment environment.
The current cycle, perhaps best described as “measured resurgence,” balances lessons from the past with renewed interest in de‑SPAC structures. Investors and sponsors are increasingly focusing on quality over speed—favoring companies with solid fundamentals, seasoned leadership, and growth potential.
The trajectory of SPACs in the coming months depends on several factors including ongoing inflows into SPAC-backed IPOs and de‑SPACs, post-merger performance and investor returns, continued regulatory oversight and disclosure standards, and the role of PIPE investors in validating valuations.
In summary, the SPAC market in 2025 is entering a more mature phase. While the volume of deals has tapered from its peak, the emphasis on structural discipline, institutional partnerships, and quality deal flow is stronger than ever. The success of companies like 38 Degrees North, Substack, and Perplexity AI reflects this evolution—and suggests a viable path forward for SPACs as part of the broader capital formation landscape.
